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[Unofficial Transcript]
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[Mr. Ross] Good afternoon and welcome to the
Subcommittee on Federal Workforce, U.S. Postal
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Service, and Labor Policy.
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Today, we have two panels that will be testifying
before us. I do want to note, though, that
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we probably will have to take a break in between
2:00 and 3:00 for two votes. So we'll have
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to take a temporary recess for about 30 minutes
at that time and then reconvene for the specific
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purpose of continuing our testimony. Hopefully,
we will be able to get through the first panel
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before we have to go do our votes.
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With that, I will call the committee to order;
and, as is custom with the full committee
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and the subcommittees, I will read the mission
statement of the Oversight Committee.
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We exist to secure two fundamental principles:
First, Americans have a right to know that
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the money Washington takes from them is well
spent; and, second, Americans deserve an efficient,
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effective government that works for them.
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Our duty on the Oversight and Government Reform
Committee is to protect those rights. Our
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solemn responsibility is to hold the government
accountable to taxpayers, because taxpayers
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have a right to know what they get from their
government. We will work tirelessly in partnership
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with citizen watchdogs to deliver the facts
to the American people and bring genuine reform
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to the Federal bureaucracy. This the mission
of the Oversight and Government Reform Committee.
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Today, we are here to discuss whether Federal
employees are adequately compensated. I'll
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begin with my opening statement and then defer
to the Ranking Member Lynch for his.
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According to the Office of Personnel Management,
the average salary for Federal employees was
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$74,311 in 2010. The average private sector
worker earned $50,462, according to an August 10,
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2010, analysis conducted by the Cato Institute.
The Federal Government also pays an average
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of 36 percent of employees' base health insurance
and pension benefits, in addition to generous
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paid leave. Taken together, Federal employees,
on average, earned $101,628 in total compensation
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in 2010, nearly four times more than the average
private sector worker.
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The members of this subcommittee recognize
that our talented workforce performs critically
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essential functions and missions throughout
the government on behalf of our Nation. We
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appreciate their service. Federal employees
should be compensated fairly. Yet current
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Federal salaries and benefits are not in line
with the marketplace when compared to the
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private workforce compensation. In a time
when our economy is in a recession, the contrast
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between the government and private sector
pay is troubling. The Federal Government has
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no incentive or obligation to reduce salaries
in order to be competitive to stay in business.
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It can simply borrow more money or raise taxes.
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With Federal spending and unemployment at
or near record highs, this hearing presents
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an opportunity for lawmakers of this committee
to hear important testimony from our distinguished
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panelists on how best to address the growing
pay disparity between the Federal civilian
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workforce and the private sector workforce.
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Over the past decade, compensation of private
sector employees has not kept pace with that
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of Federal employees. Moreover, Federal workers
receive generous benefits, vacation, health
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insurance, pension plans, retirement savings,
and disability pay. These benefits greatly
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exceed those that are normally provided to
the private sector workforce.
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Last November, President Obama announced a
2year pay freeze for Federal employees. Unfortunately,
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the pay freeze did not impact salary increases
driven primarily by the passage of time or
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bonuses, meaning President Obama's pay freeze
wasn't really a freeze.
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Additionally, according to the Bureau of Labor
Statistics, the Federal Government grew by
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157,000 people from December 2008 to 2010,
while private sector lost 8.8 million jobs.
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The unemployment rate hovers around 9 percent.
The President's budget requests an additional
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15,000 new Federal workers for the fiscal
year 2012. Our taxpayers can no longer be
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asked to foot the bill for these Federal employees,
while watching their own salaries remain flat
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and their benefits erode. Congress has an
obligation to consider all policy reforms
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that overhaul Federal compensation, reduce
costs, and better align with the private sector.
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I thank the witnesses all for appearing today,
and I look forward to your testimony.
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I now recognize the distinguished ranking
member from Massachusetts, Mr. Lynch, for
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his opening statement.
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[Mr. Lynch] Thank you, Mr. Chairman. I thank
the witnesses for their attendance here. Good
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afternoon, members of the committee.
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The topic of today's hearing regarding Federal
employees compensation requires us, I think,
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periodically to review the way we are paying
our Federal employees, reviewing the pay levels
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and benefits that they receive. But, recently,
this topic has generated much debate.
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As stewards of the people, we should conduct
robust oversight into the Office of Personnel
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Management's paysetting practices, and we
owe the U.S. taxpayer full transparency in
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this area, as well as assurance that the salaries
and benefits provided to our Federal workers
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are reasonable and appropriate.
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I note that the debate over Federal employee
benefits predated the 1883 enactment of the
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Pendleton Act overhauling the patronage system,
and I'm quite confident this debate will outlive
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the service of our committee.
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Like all Americans, Federal employees are
not immune from our Nation's economic and
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fiscal challenges; and they understand the
sacrifices called for in the 2year pay freeze
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enacted this past December by Congress and
the President.
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However, we need to be careful not to get
caught up in the oversimplistic data comparisons
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between private sector and Federal jobs. A
recent New York Times article pointed out
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that when comparing private and public sector
occupations the clearest pattern to emerge
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is an education divide. The most reliable
factor in predicting compensation levels is
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actually the level of education; and when
comparing private and public sector occupations,
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the clearest pattern to emerge is an education
divide, a divide that has grown more pronounced
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in recent decades.
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Today's Federal civilian workforce is highly
educated, with over half of all Federal employees
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working in the nine highestpaying professional
occupations in the country. It is also a workforce
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marked by a declining number of blue collar
workers, dropping from over 30 percent to
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just under 9 percent of the workforce in
the last 40 years. So the Federal employees
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are a more professional level of employee.
We have contracted out most of the blue collar
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jobs, the lowerpaying jobs, which is why you
get a discrepancy when comparing Federal employees
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to the general public.
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In light of the 2year pay freeze which is
squeezing the pockets of Federal workers who
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are also facing everescalating health care
costs today, I'm reintroducing my bill to
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inject cost transparency into the Federal
Employees Health Benefit Program contracts
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between health plans and pharmacy benefit
managers. This bill will lower Federal employees'
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outofpocket spending and the program's operational
costs, resulting in a winwin for both Federal
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employees and taxpayers.
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I look forward to hearing from the distinguished
witnesses assembled here today as your expertise
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and guidance on compensation issues enables
us to better forge a highperforming civil
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service that is prepared to meet the challenges
of the 21st century. Thank you.
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[Mr. Ross] Thank you, Mr. Lynch.
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Members may have 7 days to submit opening
statements and extraneous materials for the
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record.
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We'll now welcome our first panel, the Honorable
John Berry, who is the Director of the U.S.
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Office of Personnel Management.
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Mr. Berry, pursuant to committee rules, all
witnesses must be sworn in before their testimony,
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before they testify. Please rise and raise
your right hand.
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Do you solemnly swear or affirm that the testimony
you are about to give this committee will
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be the truth, the whole truth, and nothing
but the truth?
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[Mr. Berry] I do.
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[Mr. Ross] Let the record reflect the witness
answered in the affirmative.
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Mr. Berry, please limit your opening statement
to 5 minutes. We do have your testimony,
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and we're grateful for that, and we're very
grateful for you to be here. You may begin.
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[Mr. Berry] Thank you Chairman Ross, Ranking
Member Lynch, and members of the subcommittee.
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It's an honor to be with you here today, and
I appreciate the opportunity.
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I believe that the members of this subcommittee
and I, and all Federal employees, share the
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goal of making government more efficient while
improving services; and I look forward to
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working together with you to accomplish that.
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President Obama said it best last week when
he said, "I don't think it does any good when
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public employees are denigrated or vilified
or their rights are infringed upon. We need
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to attract the best and the brightest to public
service. Our times demand it."
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Our need for great workers could not be more
clear. Federal employees hold lives in their
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hands and oversee large sums of taxpayer dollars.
We need talented and innovative people at
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the Department of Defense supporting our warfighters.
We need great doctors and nurses at our veterans
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hospital doing lifesaving work. And we need
tough men and women at the Departments of
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Justice and Homeland Security to protect us
from another terrorist attack.
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And it is just a fact, Mr. Chairman, in order
to get these workers we must provide pay and
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benefits on par with other large companies
for whom we compete with talent. We cannot
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and should not be the employer of last resort.
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Despite the complex challenges we face, the
Federal civilian workforce is virtually as
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small today as it has been throughout the
modern era. In 1953, there was one Federal
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worker for every 78 residents. Today, 2009,
it was one for every 147.
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President Obama has frozen annual pay adjustments
for 2 years. The raw comparisons of average
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pay between Federal and private sector employees
often can ignore important differences between
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skill levels, complexity of work, scope of
responsibility, size of organization, location,
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experience level, as well as exposure to personal
danger. Even comparisons that purport to compare
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employees in the same occupations can sometimes
be misleading.
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For example, some claim that Federal attorneys
make more than private sector attorneys. In
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fact, while more than half of our general
attorneys in the Federal Government earn less
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than $90,000 in their first year of service,
the median firstyear salary for comparable
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attorneys in the private sector is $145,000.
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As another example, Federal cooks may seem
overpaid until you consider that many of them
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work in our prison system where they supervise
inmates in a very dangerous environment.
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The Federal Government, like most large employers,
also provides an array of benefits. While
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we need to do this to be competitive, note
that these benefits are not free to our employees.
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Employees share in the cost of those benefits
and, in many cases, pay 100 percent of the
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cost. For health benefits, enrollees share
30 percent of the premium costs. For dental
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and vision, they pay 100 percent of the cost.
For life insurance, they pay 66 percent for
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the basic premium but 100 percent for any
coverage beyond that. For longterm care, they
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pay 100 percent.
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I'd also like to note that Congress and President
Reagan reformed our benefits, our retirement
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benefits, 25 years ago, and this has avoided
the struggles that State and local governments
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are now going through. Those reforms guarantee
that our FERS retirement system is financially
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sound and fully funded at 100 percent.
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Bottom line, this administration is committed
to providing the superior service the American
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people expect and deserve. Managers and employees
who aren't doing that should be held accountable
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and ultimately fired if they don't improve.
There should be no place in the Federal Government
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for nonperformers to hide.
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Our pay system is not perfect. I have said
before, it is six decades old and could use
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a reexamination. We are required by law to
reduce all of the comparisons to one average
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number. This is imperfect and does not reflect
the complexity of the workforce.
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But, even so, we must reject misleading uses
of data that perpetuate the myth that Federal
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employees are, as a whole, overcompensated.
They are not. Our wages and our benefits are
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fair, and they are competitive. Any reforms
we undertake must meet the following principles
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that our existing GS system does well: transparency,
equal pay for equal work, no political influence,
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and the ability to recruit and retain the
workforce we need. This is how it must be
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if we are to recruit and retain the best workers
and carry out our critical lifesaving and
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lifeenhancing missions. Falling behind is
unacceptable.
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Thank you, Mr. Chairman. I'm happy to answer
any questions.
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[Mr. Ross] Thank you, Mr. Berry. I will yield
myself 5 minutes for questions.
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Mr. Berry, I note that in the President's
January, 2011, Pay Agent report it showed
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a 22 percent difference between Federal employee
pay and private sector pay, and I was wondering,
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did that include benefits, that assessment,
that report?
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[Mr. Berry] No, that is focused specifically
just on the pay.
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[Mr. Ross] And, subsequent to you testifying,
we'll have another panel. Mr. Biggs will testify
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that a Federal pay premium of 14 percent,
and when combined with benefits premium of
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33 percent, total Federal salary and benefits
are nearly 25 percent above those of similar
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private sector employees; and Mr. Sherk will
testify that Federal employees earn a total
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compensation of 30 to 40 percent greater
comparable than private sector workers. Do
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you agree with their findings?
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[Mr. Berry] Absolutely not.
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[Mr. Ross] And why not? Because, in one sense,
we're talking about strictly compensation.
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In the other, we're talking about compensation
and benefits.
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[Mr. Berry] If we just if we'll stay for
compensation for a second, Mr. Chairman
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and I agree, I'm happy to look at them together.
But for the purposes of this discussion, it's
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easier if we can keep them separate for a
moment.
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Their comparisons are based on gross averages.
As Congressman Lynch mentioned, the Federal
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workforce is now a very skilled, white collar,
high sophisticated workforce. It used to be
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40 years ago over a third of our workforce
was blue collar. Less than 10 percent is
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today. And so we need to compare the Federal
Government with like to like.
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What the Bureau of Labor Statistics does and
the Department of Commerce is they go into
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literally every locality, every one of your
States in the country, and they will compare
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entrylevel, midlevel, and seniorlevel career
for each position.
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So they'll look at an engineer, for example.
They will find a job in the private sector
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that is almost duplicative. And the private
sector doesn't use the GS system, so you could
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imagine this is very exhaustive. It's expensive.
It takes a lot of work.
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The work that you're going to hear from in
the next panel, they don't have the resources
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to do that. The Bureau of Labor Statistics
does that on an annual basis for us, and that's
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the data we're comparing. So we're getting
real comparison of like jobs to like jobs.
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The averages you're going to hear about from
that panel are looking at the total labor
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force of the civilian market. The primary
jobs in the private sector are retail clerks
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and service workers, waiters and waitresses.
We don't have those in the Federal Government
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and those that we do are generally provided
on a contract basis with the private sector.
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So that average, you can see, pulls down the
private sector number. But when you compare
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engineer to engineer, lawyer to lawyer, doctor
to doctor, nurse to nurse, what it shows consistently
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for 20 years is that Federal employees lag
the private sector.
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[Mr. Ross] But wouldn't you also agree, because
I don't believe OPM considers the job security
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as a criteria when determining the value of
a job. Is that correct?
0:16:34.540,0:16:39.330
[Mr. Berry] No, sir. Obviously, working in
the Federal Government, our mission is long
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term in nature.
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[Mr. Ross] And it should be for any employment.
I mean, people go into employment for careers
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and not to change jobs through a revolving
door. And I guess my question is, is that
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when you look at fiscal year 2010, the quit
rate for GS employees was 1.5 percent and
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the layoff rate was .37 percent. And do you
have any opinion as to how that would compare
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to the private sector?
0:16:59.870,0:17:04.559
[Mr. Berry] Our attrition rates pretty much
track the private sector. You know, I have
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heard some misinformation from some folks
talking about that the Federal Government
0:17:08.579,0:17:14.170
doesn't have a retention problem. Let me just
give you doctors and nurses. In '05, we hired
0:17:14.170,0:17:21.170
5,300 of them. As of today, we have lost 2,300,
for a quit rate of over 43 percent. I have
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a retention problem. And that is primarily
based when we are talking to employees as
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they leave, one of the biggest and leading
concerns is the fact that they're underpaid.
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[Mr. Ross] But, again, speaking as a whole
Federal workforce, we're only looking at a
0:17:38.580,0:17:42.660
1.5 percent quit rate. I mean, so I wouldn't
consider that to be so much of a problem.
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If it was 40 percent as a total of the entire
workforce, then I would consider it a problem.
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But let me ask you, you talked about highly
skilled occupations, engineers and lawyers,
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being paid below the market. Are there any
circumstances or instances where Federal employees
0:17:59.500,0:18:01.030
are paid above the market?
0:18:01.030,0:18:07.120
[Mr. Berry] Absolutely. Yes, sir. The average
when I say I do not mean to represent when
0:18:07.120,0:18:12.270
I say the 22 percent pay gap that the Department
of Labor references doesn't apply to each
0:18:12.270,0:18:18.390
and every job reaching every employee. That
is a gross average, which means some employees
0:18:18.390,0:18:23.840
are paid more, some are paid less, some are
paid the same. Clearly, to get that number
0:18:23.840,0:18:29.770
of the gap, the clear majority are paid less.
There are some that are paid more.
0:18:29.770,0:18:33.550
[Mr. Ross] Real quickly. I've just got a couple
of seconds. How many days of paid leave are
0:18:33.550,0:18:35.970
Federal employees entitled to? Do you know?
0:18:35.970,0:18:40.140
[Mr. Berry] We can give you it varies based
on years of service, Mr. Chairman, so if I
0:18:40.140,0:18:42.580
could I'll just provide that to you for the
record.
0:18:42.580,0:18:43.270
[Mr. Ross] Okay. Thank you.
0:18:43.270,0:18:43.970
[Mr. Berry] So you'll have it exactly.
0:18:43.970,0:18:45.510
[Mr. Ross] I see my time's up.
0:18:45.510,0:18:49.890
I'll now recognize the distinguished gentleman
and ranking member from Massachusetts, Mr.
0:18:49.890,0:18:51.000
Lynch, for 5 minutes.
0:18:51.000,0:18:53.540
[Mr. Lynch] Thank you, Mr. Chairman.
0:18:53.540,0:18:57.260
Welcome, Director Berry. I want to thank you
for the good work you're doing over there.
0:18:57.260,0:19:03.510
One of the things I just want to start out
by pointing out is I notice behind me there's
0:19:03.510,0:19:10.510
a chart here, employment changes, that the
Federal Government added 157,000 jobs. I just
0:19:11.910,0:19:18.910
want to now, this is 2008 through 2010. Now,
you would think that that meant that employment
0:19:19.170,0:19:25.020
at the Federal in the Federal sector actually
went up. During I went back, and I got the
0:19:25.020,0:19:30.990
numbers because I was surprised by that number,
and I went back and actually calculated the
0:19:30.990,0:19:37.990
number of separations, the number of people
who left the Federal Government. We had almost
0:19:39.550,0:19:46.550
207,000 leave in 2010, 90,000 in 2009 just
over 90,000 and 219,000 in 2008, for a total
0:19:51.740,0:19:58.740
separation of 616,359 employees. So while
they're saying there's 157,000 new firsttime
0:20:00.100,0:20:07.100
employees, there's also been a reduction of
616,000 employees who left. And I think that
0:20:08.600,0:20:15.600
also speaks to the argument of job security.
If 616,000 employees and these were deaths,
0:20:16.150,0:20:23.150
firings, these were quits, these were retirements,
all combined. So it does, I think, provide
0:20:23.799,0:20:27.460
a little wider picture.
0:20:27.460,0:20:32.590
Director Berry, much is said of the general
schedule's lack of performance management,
0:20:32.590,0:20:37.750
mainly its inability to appropriately reward
individual performance. I think it was because
0:20:37.750,0:20:42.960
of some of those concerns back in 2009 we
experimented with an alternate pay system
0:20:42.960,0:20:49.320
at the Department of Defense called the National
Security Personnel System. We spent hundreds
0:20:49.320,0:20:56.320
of millions of dollars implementing the new
system and, oddly enough, we had .8 percent
0:20:57.309,0:21:04.309
of people who usually are rejected for step
increases under the old system, and under
0:21:06.410,0:21:13.410
this new system, this payforperformance system,
.2 .2 percent were rejected for the step
0:21:15.890,0:21:20.670
increases. So with the new system, on pay
for performance that's been suggested as being
0:21:20.670,0:21:27.670
an alternative here, we had less people get
disciplined or rejected for their step increases.
0:21:28.170,0:21:35.170
So I'm just curious. It seems like the managers
were doing the same thing under the new system
0:21:35.420,0:21:39.980
as they did under the old system, and I'm
just curious if that's a if you think that's
0:21:39.980,0:21:42.160
a viable alternative here.
0:21:42.160,0:21:44.920
[Mr. Berry] Well, Mr. Lynch, I think you
hit on two points that I think it's important
0:21:44.920,0:21:51.340
for the committee to keep in its sights, if
you will, as you move forward on this path.
0:21:51.340,0:21:56.679
First is, you know, the Congress repealed
NSPS, and so the Defense Department has been
0:21:56.679,0:22:02.880
moving employees back into the GS system.
If you think that their payforperformance
0:22:02.880,0:22:08.320
system, NSPS, is going to save the taxpayer
dollars, what we found is that 20 percent
0:22:08.320,0:22:14.740
of the workforce, in moving back, is on retained
pay, meaning that they are making more than
0:22:14.740,0:22:19.200
they would have made had they been in the
GS schedule. And so, therefore, they're going
0:22:19.200,0:22:24.440
to stay frozen until the GS schedule catches
up with them. Now, that's a big number.
0:22:24.440,0:22:31.000
The second point is it goes to something
I've learned in the 2 years on the job here
0:22:31.000,0:22:35.460
in working on this, and I've spent a lot of
time looking at pay, performance, and the
0:22:35.460,0:22:41.799
combination thereof and learning from the
NSPS story. And I have concluded that it is
0:22:41.799,0:22:48.000
more important to focus on the performance
side of the equation first and get that right.
0:22:48.000,0:22:53.910
Good performance is based on three key things
that we do to a certain extent in the Federal
0:22:53.910,0:22:57.450
Government, but I would not sit here and tell
you we do well. We need to do it a lot better.
0:22:57.450,0:23:02.830
And that is, align organizational mission
and goals right down through the SES down
0:23:02.830,0:23:08.030
to the individual employee's performance and
then have managers, employees regularly having
0:23:08.030,0:23:12.900
conversations, just like they do in the private
sector. Are we on track or off track? And
0:23:12.900,0:23:17.799
if we're off track, laying out the plan to
be back on, and if they are not back on, they're
0:23:17.799,0:23:19.780
gotten rid of.
0:23:19.780,0:23:23.750
That's a good performance system. We can do
that.
0:23:23.750,0:23:28.570
And so what I'm going to do, and what we just
did yesterday through the Chief Human Capital
0:23:28.570,0:23:33.750
Officers Council, is we've created a working
group made up and shared by two career senior
0:23:33.750,0:23:40.660
executives so it won't have political interference
or bias and they will report in on what can
0:23:40.660,0:23:44.740
we do as the Federal government to tighten
and strengthen our performance system. I think
0:23:44.740,0:23:50.610
if we get that right then we can have the
discussion about pay, and we can avoid repeating
0:23:50.610,0:23:52.919
the same mistakes that were made under NSPS.
0:23:52.919,0:23:56.010
[Mr. Lynch] That's great. Thank you, Mr. Director.
0:23:56.010,0:23:57.500
Thank you, Mr. Chairman. I yield back.
0:23:57.500,0:23:58.260
[Mr. Ross] Thank you, Mr. Lynch.
0:23:58.260,0:24:03.960
I recognize the distinguished gentleman from
Utah for 5 minutes, and then we'll probably
0:24:03.960,0:24:04.580
recess to go vote.
0:24:04.580,0:24:06.080
[Mr. Chaffetz] Thank you for being here.
0:24:06.080,0:24:10.179
I want to make sure we get the numbers. My
understanding is since the time Barack Obama
0:24:10.179,0:24:15.270
took office until now there is a net increase
of Federal employees, which excludes the uniform
0:24:15.270,0:24:22.270
military, census and postal, the net increase
is 157,000 additional Federal workers, yes?
0:24:23.260,0:24:28.540
[Mr. Berry] There is an increase, Mr. Chaffetz;
and about 75 percent of those would be comprised
0:24:28.540,0:24:31.669
in VA hospitals, Homeland Security, Justice
Department.
0:24:31.669,0:24:37.250
[Mr. Chaffetz] But the net increase, the net
increase of Federal employees is roughly 157,000
0:24:37.250,0:24:38.270
additional Federal workers.
0:24:38.270,0:24:38.520
[Mr. Berry] Yes, sir.
0:24:38.429,0:24:42.919
[Mr. Chaffetz] And you did announce in October
that you plan to hire an additional 125,000.
0:24:42.919,0:24:48.440
Not all 125,000 would be a net increase, but
roughly 40 to 50,000 would be a net increase
0:24:48.440,0:24:50.450
in current employment levels in the Federal
Government.
0:24:50.450,0:24:54.400
[Mr. Berry] I think that number, Mr. Chaffetz,
has been overtaken by the President's budget
0:24:54.400,0:24:57.250
that was submitted which shows that number
staying flat for 3 years.
0:24:57.250,0:25:00.700
[Mr. Chaffetz] My understanding of the President's
budget is that he's actually increased the
0:25:00.700,0:25:07.280
compensation level in his budget by 2.5 percent,
or roughly $6 billion, this year over last
0:25:07.280,0:25:07.530
year.
0:25:07.400,0:25:08.049
[Mr. Berry] Well
0:25:08.049,0:25:14.540
[Mr. Chaffetz] Why the increase? Why the additional
$6 billion? If there's a pay freeze and you're
0:25:14.540,0:25:18.929
not going to need very many new employees,
why a $6 billion increase in that line item?
0:25:18.929,0:25:22.950
[Mr. Berry] I would need to understand better
exactly what line you're referencing in the
0:25:22.950,0:25:23.200
budget.
0:25:22.980,0:25:29.980
[Mr. Chaffetz] It went from $236,175,000 to
$242 million I'm sorry billion dollars
0:25:35.630,0:25:40.780
between 2011 and 2012 based on the executive
branch, excluding the United States Postal
0:25:40.780,0:25:41.040
Service.
0:25:41.040,0:25:45.570
[Mr. Berry] There is a natural growth, sir,
of promotions, for example. The President's
0:25:45.570,0:25:49.010
pay freeze does not prevent people from being
promoted based on performance.
0:25:49.010,0:25:54.290
[Mr. Chaffetz] So the reality on a pay freeze
is the net did not save the American taxpayers
0:25:54.290,0:25:57.460
money. In fact, it doesn't keep them equal.
In fact, that number is actually growing,
0:25:57.460,0:26:00.540
is it not, because of bonuses and step increases
and other things?
0:26:00.540,0:26:04.960
[Mr. Berry] No, the pay freeze, sir, is a
costofliving adjustment that is a definite
0:26:04.960,0:26:09.710
savings. It saves over $28 billion in 5 years
and $60 billion in 10 years.
0:26:09.710,0:26:15.340
[Mr. Chaffetz] The reality is it will cost
the taxpayers more. Taxpayers will pay more
0:26:15.340,0:26:19.830
for Federal employees, as a whole, this year
as opposed to the year before.
0:26:19.830,0:26:24.460
[Mr. Berry] Had the President not frozen pay
that same number would be $28 billion higher.
0:26:24.460,0:26:25.980
[Mr. Chaffetz] What I'm saying is accurate,
right?
0:26:25.980,0:26:30.559
I guess what is concerning to many of us is,
when the President and you, in your very first
0:26:30.559,0:26:35.240
line say, quote, President Obama has frozen
annual pay adjustments for 2 years, it gives
0:26:35.240,0:26:38.549
the impression that we're not going to spend
more money on personnel. But the reality is
0:26:38.549,0:26:43.010
we're going to spend billions and billions
more because of bonuses and step increases
0:26:43.010,0:26:47.470
and other things. At the same time, you're
hiring additional people. So for the Federal
0:26:47.470,0:26:51.669
workforce that is working hard, they're somewhat
offended because their pay is frozen. Meanwhile,
0:26:51.669,0:26:53.169
you're out hiring additional people.
0:26:53.169,0:26:57.470
[Mr. Berry] Mr. Chaffetz, in the President's
pay freeze he also directed OPM and the Office
0:26:57.470,0:27:02.470
of Management and Budget to report back to
him on a program that will address and deal
0:27:02.470,0:27:08.330
with bonuses and reward and incentive program
for Federal employees. The Office of Management
0:27:08.330,0:27:12.230
and Budget and I will be doing that in short
order, and we will look forward to discussing
0:27:12.230,0:27:16.480
that with you more. But I think you will see
that those numbers will change.
0:27:16.480,0:27:20.030
[Mr. Chaffetz] My understanding is, in 2009,
based on a letter that you gave to this committee
0:27:20.030,0:27:26.799
on February 16, it said that 779,000 people
in the Federal Government actually got awards,
0:27:26.799,0:27:32.970
which is a combination of bonuses and other
things. In fact, over 63 percent of the Federal
0:27:32.970,0:27:38.100
workers actually got, quote, unquote, awards.
Why so many people are getting so many awards
0:27:38.100,0:27:40.559
at a time when people are losing their jobs?
0:27:40.559,0:27:45.760
[Mr. Berry] You have to understand with a
2.1 million size workforce the average number
0:27:45.760,0:27:48.350
in that GS of those awards is below a thousand
dollars.
0:27:48.350,0:27:50.500
[Mr. Chaffetz] But 63 percent of them.
0:27:50.500,0:27:55.010
[Mr. Berry] These are not the Wall Street
bonuses that people are used to when they
0:27:55.010,0:27:59.240
think of a bonus. These are recognizing outstanding
performance.
0:27:59.240,0:28:03.730
[Mr. Chaffetz] That's offensive to a lot of
people. Sixtythree percent of Federal workers
0:28:03.730,0:28:08.110
got a bonus, got an award, and there are lot
of people out there losing their job. They
0:28:08.110,0:28:11.929
have their own businesses. They don't understand
when the President stands up and says, oh,
0:28:11.929,0:28:15.590
we're going to have a pay freeze; and then
you're handing out bonuses to get around it.
0:28:15.590,0:28:17.669
It doesn't make sense.
0:28:17.669,0:28:21.320
How much money are you going to give away
in bonuses this next year?
0:28:21.320,0:28:25.929
[Mr. Berry] It works out to be between 1 and
2 percent of payroll, sir, that is used in
0:28:25.929,0:28:27.700
bonuses for the GS schedule.
0:28:27.700,0:28:29.500
[Mr. Chaffetz] What is the dollar amount of
that?
0:28:29.500,0:28:32.260
[Mr. Berry] I'll have to get you the exact
number for the record, sir.
0:28:32.260,0:28:35.419
[Mr. Chaffetz] My understanding, according
to Federaltimes.com, which put out a report
0:28:35.419,0:28:41.350
on December 6 of 2010, it said that more than
threequarters of the 1.4 million General
0:28:41.350,0:28:47.100
Schedule employees will get at least one pay
raise between 2011 and 2012.
0:28:47.100,0:28:52.000
[Mr. Berry] One of the things that I you know,
and I will take it's a legitimate concern
0:28:52.000,0:28:55.660
to be addressed. And one of the things we
can take back to this working group that we've
0:28:55.660,0:28:59.190
established, the CHCO council, is that a fair
number?
0:28:59.190,0:29:00.500
[Mr. Chaffetz] Do you dispute that number?
0:29:00.500,0:29:05.559
[Mr. Berry] I trust you, Mr. Chaffetz. I would
presume that you're reading from a legitimate
0:29:05.559,0:29:05.809
document.
0:29:05.559,0:29:05.809
[Mr. Chaffetz] Well, thank you. The answer
is yes.
0:29:05.650,0:29:05.900
I yield back.
0:29:05.650,0:29:10.840
[Mr. Ross] Thank you. The gentleman's time
has expired.
0:29:10.840,0:29:14.950
What we'll do is we'll take a recess to continue
our votes, and we'll reconvene 5 minutes
0:29:14.950,0:29:17.700
after our last vote. It should be within about
a half hour. Thank you.
0:29:17.700,0:29:18.809
[Recess.]
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